7 Great Reasons to Invest in Long Beach Real Estate
- Homeownership Builds Wealth Over Time
Homeownership can be a very savvy financial move – but only if people buy homes they can actually afford. in 2016, this idea of sticking to a home you can actually afford to gradually build wealth is a “rule” that just happens to be new and old at the same time.
- Your Reap Mortgage Tax Deduction Benefits
The tax code allows homeowners to deduct the mortgage interest from their tax obligations. This first year you buy your home, you are able to claim the points (also called origination fees) on your loan, despite whether they are paid by you or the seller. Real estate property taxes paid on your primary residence and a vacation home are fully deductible for income tax purposes.
- You Build Equity Every Month
Your equity in your home is the amount you can sell it for minus what you owe on it. The way mortgages work is that the principle portion of your payment increases slightly every month year after year. It’s lowest on your first payment and highest on your last payment. Thus, as the months and years go by, your equity grows!
- Tax Deductions on Home Equity Lines
You can deduct the interest you pay on a home equity loan (or line of credit). This allows you to shift your credit card debts to your home equity loan, pay a lower interest rate, and get a deduction on the interest as well.
- You Get a Capitol Gains Exclusion
If you buy a home to live in as your primary residence for more than two years then you will qualify. When you sell you can keep profits up to $250,000 if you are single, or $500,000 if you are married, and not owe any capitol gains taxes.
- A Mortgage is Like a Forced Savings Plan
Paying that mortgage every month and reducing the amount of your principal is like a forced savings plan. Each month you are building up more valuable equity in your home.
- Long Term, Buying is Cheaper Than Renting
Over time, as the interest portion of your mortgage payment decreases, the interest that you pay will eventually be lower than the rent you would have been paying. But more importantly, you are not throwing away money on rent.
Sponsored by the friendly folks at Alpine Mortgage.